Pension funds incur lawmakers’ wrath

Social security funds came under heavy attack yesterday, with MPs accusing them of robbing the poor and enriching the rich.

The legislators faulted the pension funds’ preference on real estate investments, which they said had little, if any, impact on the economy.

Speaking at the seminar that the Social Security Regulatory Authority (SSRA) organised for them, the MPs proposed an investment shift from real estate to development of transport and power infrastructure that have high potential of stimulating the economy.

“If this is not thieving, then what is it; what kind of a tworoom house can cost 70m/-,” queried Mr Keissy, adding that although he has himself constructed over 30 houses, he has never experienced such inflated construction costs.

He accused the pension fund of using the members’ money to construct the houses whose prices the fund inflates to further exploit members who provided the capital.

“You are misusing the poor people’s money by providing unrecoverable loans to the rich people who are not even your contributors,” the MP charged. Sharing her personal experience, Ms Mtinda said she had attempted to buy a moderate NSSF house at Kijichi in Dar es Salaam at 103m/-.

She said bank loan terms demanded that she repays 1.6m/- monthly for 20 years, translating into 384m/-, almost four times the principal amount: “Show me any ordinary Tanzanian who can afford such a gargantuan financial obligation,” she demanded.

Ms Suzan Kiwanga (Special Seats-CCM) complained about the medical service insurance by NSSF, saying the fund was restricting members to inferior hospitals while their staff members enjoyed superior facilities.

Responding to the MPs’ concerns, SSRA Director General Irene Isaka conceded that pension funds were selling houses at high prices but said the regulator was working out price-control guidelines.

Earlier in her presentation, Ms Isaka assured the lawmakers that the pension sector, with six funds, remains strong and sustainable.

She said the regulatory authority was currently working on strategies to widen coverage of pension funds, which hitherto covered less than six per cent of the country’s total labour force estimated at 23m/-.

“It is unfortunate that the neediest, poor peasants in rural areas have been left out,” observed Ms Isaka, noting that the regulator is also striving to harmonise benefits to all pension funds’ members.